Knez v. Reliable Realty, Inc.

626 P.2d 372, 51 Or. App. 487, 1981 Ore. App. LEXIS 2240
CourtCourt of Appeals of Oregon
DecidedApril 6, 1981
DocketNo. A7704-05868, CA 17106
StatusPublished
Cited by1 cases

This text of 626 P.2d 372 (Knez v. Reliable Realty, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Knez v. Reliable Realty, Inc., 626 P.2d 372, 51 Or. App. 487, 1981 Ore. App. LEXIS 2240 (Or. Ct. App. 1981).

Opinion

THORNTON, J.

Plaintiffs appeal from a judgment for defendants on their claim for breach of fiduciary duty against defendant Forquer, a salesman for defendant Reliable Realty (Reliable). They assign error to the following:

1) Denial of their motion for a new trial;1

2) Entry of a judgment on a stipulated record rather than a summary judgment;

3) Finding that Forquer was not plaintiffs’ agent, contrary to the allegations in the complaint;

4) Finding that the judgment in a prior action against plaintiffs and defendants by purchasers of plaintiffs’ apartment complex, which terminated in a jury verdict for defendants, barred proof that Forquer made fraudulent representations to the buyers concerning the condition of the apartments;

5) Exclusion of evidence of the unauthorized nature of Forquer’s representations;

6) Finding that plaintiffs’ evidence of a fiduciary relationship between them and defendants was deficient; and

7) Holding that plaintiff’s claim for attorney fees for defending the first lawsuit is precluded by the statute of limitations.

The essential facts are as follows:

In 1974, Forquer was a real estate agent and an investment counselor for the Munyans. He examined several properties and concluded that the Knezes’ 7-plex would be an ideal investment for the Munyans. Although he had no listing and the Knezes had not contemplated selling the complex at the time, Forquer approached them and told them that he represented some people who would be interested in buying the apartments. Forquer requested an exclusive listing from them, but there is a dispute in the [490]*490evidence as to whether a listing was ever given. In any case, Forquer communicated an offer to purchase for $85,000, which the Knezes, who had not had the property appraised, declined, allegedly against Forquer’s advice. Later, they counteroffered to sell for $90,000. The Munyans came back with an offer of $87,000 and an agreement was reached at that figure with the Knezes to pay a reduced real estate commission. A contract for sale was signed.

On March 13, 1975, the Munyans sued the Knezes, Reliable and Forquer for alleged misrepresentations made by the latter concerning the condition and profitability of the apartments. The Munyans maintained that Forquer was acting as the Knezes’ agent and they were thus vicariously liable for his representations. The Knezes and Reliable filed cross-claims for indemnity, each claiming the other was the source of the misinformation. On March 24, 1976, the trial court granted the Knezes’ motion for involuntary nonsuit against the Munyans on the strength of a clause in the contract that no representations were made other than those stated in the contract. A voluntary nonsuit was also granted on the Knezes’ cross-claim and they were dismissed from the case. The trial court refused to dismiss the case against Forquer and Reliable on the stated ground that the clause was primarily for the Knezes’ benefit, not that of the agent. There was also evidence from which the trial court could have found that Forquer was the agent of the Munyans as well and, in that capacity, owed duties to them independent of those owed to the Knezes. Ultimately, a jury verdict for Forquer and Reliable was returned.

On April 22, 1977, the Knezes filed this action seeking recovery of the commission paid Forquer and the costs of defending the earlier action. The basis for recovery was an alleged breach of a fiduciary duty of loyalty stemming from an agency relationship between the parties which the Knezes contend arose from Forquer’s role in the sale of the property. (In the first case, the Knezes had taken the alternative position that Forquer was not their agent - and hence they were not vicariously liable to the Munyans for misrepresentation - or, if he was their agent, the representations were not authorized.) Reliable and Forquer interposed two demurrers, a plea in bar and a motion for [491]*491summary judgment, all of which were denied by various trial judges. Grounds alleged in these pleadings included: 1) that the Knezes were collaterally or equitably estopped to assert an agency relationship by their position in the prior lawsuit; 2) that the complaint failed to allege recoverable damages, which rendered the cause of action deficient; 3) that the Knezes’ pleadings and testimony in the prior case constituted a conclusive admission of nonagency; and 4) that the claim was barred by ORS 12.2202 because a voluntary nonsuit was taken on the indemnity cross-claim and it had not been refiled within 12 months.

The case was eventually set down for trial on November 23,1977, on the third amended complaint. Upon convening court, the trial judge announced that he had reviewed the record of the prior case and the pleadings here and was disposed to hold that no agency existed. He stated he would nonsuit or direct a verdict against the Knezes. They argued that the evidence would show that Forquer was the agent of both themselves and the Munyans and had failed to reveal this conflict of interest. They attempted to dissuade the court from entering some kind of judgment without hearing the evidence. The trial court, however, was adamant and the following colloquy ensued:

"THE COURT: Why don’t you do this, gentlemen? Work out a stipulated set of facts that would go to the jury and then you would have something to appeal to the Court of Appeals on, in the stipulated facts, instead of taking up all of your time to have a jury up here. And then let me direct a verdict of nonsuit. I think you are wasting your time.
"If you don’t want to do that, let’s call a jury in and get the issues out.
"MR. WALKER, [Forquer’s and Reliable’s attorney]: I think we can stipulate.
[492]*492"MR. JAMES, [the Knezes’ attorney]: Your Honor, I would call a jury because I don’t think the Court would direct a verdict.
"THE COURT: I have stated I would nonsuit it.
"MR. JAMES: Okay, nonsuit. I am not challenging the Court. The premise that you are operating on is: No harm, no foul — in basketball, no blood, no foul — just because the Court doesn’t see the damage. But the evidence will be that this man not only lied —
"THE COURT: Gentlemen, we could sit here and argue for three or four days. I am willing to do anything you want to do. I will call a jury and you put all your facts in there.
"I am satisfied, from the record that I have read, that I would probably grant an involuntary nonsuit or I will grant a directed verdict on about four different bases.
"But, if you can stipulate to the facts and agree what you are going to present to the jury and let me go over it, then that’s fine. It doesn’t make any difference. I am going to be here all day, anyway.
"I am just trying to save you a little time, Mr. James.” Tr. 16-17. (Emphasis added)

Following a recess, the Knezes stipulated to what the evidence would be, and augmented the record by means of an offer of proof with a number of documentary exhibits and a recital by their attorney of the facts to which they would testify.

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Cite This Page — Counsel Stack

Bluebook (online)
626 P.2d 372, 51 Or. App. 487, 1981 Ore. App. LEXIS 2240, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knez-v-reliable-realty-inc-orctapp-1981.